If you are an expat in the UAE and looking for independent financial advice, the one sure outcome is you will pay for the privilege.
But forking out for good advice is often a money-saver providing you have picked the right adviser from the outset.
Too many tricksters say they are financial advisers when they do not have the qualifications or experience.
These unscrupulous fraudsters may have the trappings of a professional, but they either charge eye-watering fees or pick up big commissions from selling unregulated or unsuitable products and services.
Picking a trusted adviser varies between countries.
Some places, such as Britain, the US and Australia have strict government regulation, while many others have no rules, which means anyone can set up as an IFA.
Although regulation in the UAE is tightening up, it is still far behind so it's imperative that you ask your adviser some key questions before handing over any cash.
A financial adviser is someone who can help you make the right decisions about the best way of saving, investing and protecting your wealth.
Although some expense is involved, an adviser should offer value for money by giving an expert insight to your finances.
Financial advisers come in three types for expats:
IFAs are regulated in the country where they give advice, which means they must pass exams and apply for a licence before they can advise on pensions or investments. Regulated advisers also abide by independent ombudsman rulings if customers have complaints that they cannot resolve with the IFA.
There’s no such thing as a free lunch, and in the financial world this is doubly so. Time is money and if you are consulting an adviser, they will need you to pay them.
Some countries outlaw commission, so IFAs charge for their time, like a lawyer.
If an IFA is offering free advice, beware because that probably means the provider is paying a significant commission which is bumping up the price of the product.
If an IFA is charging, the price will vary according to where you are, their qualifications and experience.
In Britain, basic pension advice for someone approaching retirement costs between £1,000 and £3,000.
Financial advisers charge in three ways:
You can use the UK as a guideline for how much financial advice could cost in Dubai, however remember that the UK is very different so cannot be compared like for like.
You might as well ask why speak to a lawyer about legal problems or why go to the doctor if you are ill.
Some financial products are complicated and many people are not confident they can make the right decision about how to proceed without some professional insight.
Financial advisers deal with some key aspects of expat finances:
Many wrongly consider they are not UK resident for tax just because they have lived abroad for a while, but this may not be the case.
Good IFAs will have back-office support from lawyers and tax experts who can settle any tax residence doubts for expats.
But complicated rules surround transferring a UK pension overseas that can easily trap the unwary. Many international IFAs specialise in QROPS.
Specialist providers do offer portable cover to expats on the move.
IFAs generally offer expert help with wills and inheritance.
In most cases, expats are free to make their own decisions about their finances and do not have to consult an adviser.
Some specific exceptions are pensions and investments.
In the UK, the law says expats must take third party advice from a financial adviser or an advice service like Pension Wise before moving pension funds worth more than £30,000 to a QROPS, QNUPS or SIPP.
Many pension and investment providers will want to see a written recommendation report from an IFA before agreeing to open an account with a new customer.
There’s no fool proof way to finding a trustworthy financial adviser.
However, if you are cold-called – that’s approached out of the blue by phone, email or text by an advice firm - then the possibility of the adviser being a scammer is high.
Personal recommendation is a good way to find an adviser, but because someone you know is satisfied with the service they have had does not mean you or someone else will have the same experience.
Advice firms offer international, national and local services.
Try searching online and compare quotes and information about services from two or three firms before making a final decision about who to go with.
If you want to find the best financial adviser in Dubai or Abu Dhabi, you'll have to do your homework first.
Alternatively, you can search for individuals on Profezo or WhichFinancialAdviser.com, as they have been verified for their qualifications and reviewed by real people.
Read more: 7 things to consider when choosing a financial adviser in the UAE.
Regulated financial advisers will always be registered with the financial authority in the country where they work. In the UAE there are 3 main regulators to look for:
Always ask for their registration and check this out online through the regulator’s web site or by calling the regulator.
Do not rely on logos and registration details displayed on web sites or headed notepaper as these can easily be added to fool customers that a business is bona fide.
Spend a few minutes searching the adviser’s online presence.
Most will have a web site, a Facebook page and maybe a Twitter account. Searching the adviser and the firm they work for by name on Google will quickly highlight any complaints.
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